Last week after the surprise resignation of MTA chairman Jay Walder, an MTA insider told us that among the many reasons he was leaving was the bleak promise of either more fare hikes or service cuts in the next two years. And today, the MTA announced their five-year financial plan, which will include two fare hikes in 2013 and 2015, avoid service cuts, and bring "fragile stability" to the MTA, according to Walder.
Walder presented the new plan, which he projects will save the MTA a total of $799 million by 2015, to the MTA's board earlier today—you can read a Tweetcap of it here. They don't specify how much individual rates will go up, but both fares and tolls will be raised by a combined 7.5 percent. The last 7.5 percent hike, enacted at the end of last year, pushed the cost of monthly MetroCards from $89 to $104.
In addition to the fare hikes, MTA also said that they are cutting the administrative payroll by 15 percent, reducing how frequently it runs shuttle buses when construction shuts down subway service, and pushing contractors to keep their costs down. Even with all that revenue, the MTA will need to find another $9 billion to pay for all of the five-year plan, which experts say won't be easy to come by: "The MTA is between a rock and a hard place. The rock is the enormous capital needs of the regional transit system. The hard place is the political reality that new sources of revenue are difficult, if not impossible, in this governmental climate," said Richard Anderson, president of the New York Building Congress, a group that represents the construction industry.
Andrew Saul, the chairman of the authority's finance committee, called the MTA's growing debt, which would increase from all the borrowing which would be necessary to pay the operating budget, a "ticking time bomb." "This is going to be a major problem in the future, no question about it," he warned, projecting that the debt could grow to $31 billion, the financial burden of which would be "on the riders' backs."
Below, you can check out the full preliminary financial plans:
